This is a case about tax credits for contributions made to private tuition funds that make grants to students who go to private schools. Many of those schools are religious and some of the qualified funds only make grants to students who go to religious religious schools. [Lyle] Denniston begins his description [of the argument] with a claim that he detected Elena Kagan's purchase on the mind of Tony Kennedy (a subject we were just talking about the other day). Denniston says Kagan and Kennedy — the 2 Ks (sounds like trouble!) — "took crucial, reinforcing roles." I don't see much support for that point.

This case has a substantive Establishment Clause issue — whether government is subsidizing religion — and a threshold issue about standing — whether taxpayers can sue over this. These issues are linked because they both may depend on whether a tax credit turns the privately donated money into money from the state....

[T]ax credits and governmental expenditures do not both implicate individual taxpayers in sectarian activities. A dissenter whose tax dollars are “extracted and spent” knows that he has in some small measure been made to contribute to an establishment in violation of conscience. In that instance the taxpayer’s direct and particular connection with the establishment does not depend on economic speculation or political conjecture. The connec­tion would exist even if the conscientious dissenter’s tax liability were unaffected or reduced. When the government declines to impose a tax, by contrast, there is no such connection between dissenting taxpayer and alleged establishment. Any financial injury remains speculative. And awarding some citizens a tax credit allows other citizens to retain control over their own funds in accor­dance with their own consciences.

Cash grants and targeted tax breaks are means of accomplishing the same government objective — to provide financial support to select individuals or organizations. Taxpayers who oppose state aid of religion have equal reason to protest whether that aid flows from the one form of subsidy or the other. Either way, the government has financed the religious activity. And so either way, taxpayers should be able to challenge the subsidy.

Still worse, the Court’s arbitrary distinction threatens to eliminate all occasions for a taxpayer to contest the government’s monetary support of religion. Precisely because appropriations and tax breaks can achieve identical objectives, the government can easily substitute one for the other.

I love the clarity of Kagan's writing. But it will take more than that to gain purchase on Kennedy's brain. The truth is that Flast is out of line with a whole lot of other standing cases. Distinguishing this case from Flast may seem like a strain, but it's a more a matter of not letting the anomaly grow. Justices Scalia concurs, with Justice Thomas, to say Flast should be overruled altogether, and not just costrained. Scalia is pulling on one side, and Kagan on the other, and Kennedy maintains his purchase on the center.

Let's start off with that Tribe is a prostitute. But, at times a good one.

That said, he may be right here to some extent, but wrong in this specific instance. Of the three leftist women on the Court right now, Justice Kagan is likely the one most likely to get Kennedy's vote. Justice Ginsburg still seems the doctrinaire ACLU lawyer after all these years, while the Wise Latina Justice just comes across as the Hispanic affirmative action hire. On the other side though, are some of the best conservative legal minds around.

So, while Tribe may be right that Kagan has a better shot at influencing Kennedy than does Ginsburg, the reality is that it is going to be an uphill battle for any of the left on the Court to get Kennedy on-board, when the other four on the right are in opposition.

I particularly liked the majority's characterization of the challenging taxpayers' argument:

Respondent's contrary position assumes that income should be treated as if it were government property even if it has not come into the tax collector's hands.

For the most part doctrinaire liberals think everything you make is the government's property unless it lets you have it. We are only one SCOTUS Justice away from that philosophy being the law of the land.

When the government declines to impose a tax, by contrast, there is no such connection between dissenting taxpayer and alleged establishment.

From this, my own purchase on Kennedy's mind is that whether a tax credit is a "refundable" tax credit or not (i.e., paid to the spender whether or not there was tax liability to erase in the first place) would be of critical importance in determining the standing of the "dissenting taxpayer" to bring an establishment claim.

Oddly enough while I agree with the decision in a way agree also with Justice Kagan's reasoning. Her argument is revealing and arguably true.

That *functionally*(?) tax credits/breaks are the same as appropriations (read: government spending). Is this not exactly what conservatives often argue? That "targeted tax breaks" - which President Obama just loves - are in fact government expenditures? As opposed to real reductions in tax rates.

Not entirely off topic today drove past a home with new solar panels with a "Installed by XXX" sign in front. Contractor friend explained that these cost about $80k but you get a huge government tax credit which means your uber kool solar panels end up costing about $15k. But (a) who can afford $80k up front let alone $15k total? and (b) who pays for that huge tax credit? Why we do! Yes indeed an example of "targeted tax breaks" really means "rob from the middle class and give to the wealthy because the wealthy are doing something the governing class approves".

I think Justice Kagan is largely correct in her argument (credits/breaks = appropriations/expenditures) but incorrect with regard to tort/standing. If gifts to my church are tax deductible is that really that same as making Joe Atheist pay for religion?

Distinguishing between a tax credit and a government expenditure is similar, although not identical, to distinguishing between regulating action and regulating inaction.

One could say, with Kagan, that just as allowing a tax credit for a certain purpose is just like spending money to further that purpose, regulating inaction is just like regulating action. But the majority says, no, there is a difference that matters.

I think Rick67 has it. Charitable gifts are deductible, whether secular or religious. Most secular charitable gifts: operas, arts and sympathy and like benefit the rich. The power to tax is the power to destroy. Free secular public education has an unfair advantage over private education. Most choose private schools because they are better, religious or not. They do so called liberal want to deny private education for the children of the poor?

Imagine that you installed those solar panels right now and spent $80K expecting a $65K credit on your 2011 tax bill. You then lose your job and are unemployed for the rest of the year. Consequently, you have no tax liability due, and thus have nothing to offset the $65K credit against. That's a different situation than if the government just gave you $65K.

@Rick67That *functionally*(?) tax credits/breaks are the same as appropriations (read: government spending). Is this not exactly what conservatives often argue? That "targeted tax breaks" - which President Obama just loves - are in fact government expenditures? As opposed to real reductions in tax rates.

No conservative believes that lower taxes are a government "cost". That would imply the government somehow earned those taxes, which is bad thinking.

The legal technicalities in this case make my head spin. Dear lawyers, is Kagan putting out the fundamental liberal opinion that everyone's income is state property unless the state allows you to keep some of it if you spend it on things that the state approves? Or is she saying that the only proper tax is a tax rate against all income, no exceptions? When it comes to fiscal policy liberals care about results more than principles, hence the liberal argument, depending on who is talking and in what forum, that the health care mandate is just a tax, except when you want to pass a law through reconciliation when the mandate becomes a fine.

In this case conservatives have adopted that liberal confusing of ends and means. They wanted to support religion with public funds but the constitution clearly forbids that so they called the appropriation in support of religious schools a tax credit.

"Precisely because appropriations and tax breaks can achieve identical objectives, the government can easily substitute one for the other. "

I don't see an easy substitution between the two policy choices; nor is it clear they can achieve identical objectives.

I'm not a 'Most-Favored American' among Democrats - so they don't appropriate money to me; but I get some of their tax breaks.

I'm not a 'Most-Favored Business Class' among the Republicans - so they also do not appropriate money to me; but I get some of their tax breaks.

A true fiscal conservative would slash appropriations such that I would get none as well - and probably eliminate the tax breaks I get for good measure.

In no case does government achieve the same objective with appropriations as it does with tax breaks. Appropriations by their nature favor big, inefficient, top-heavy solutions that are usually rife with large-scale corruption - think ACORN. Tax breaks favor wide-spread, small-scale corruption - think charitable write-offs.

When I first read her quoted statement I thought she was taking a conservative tack on the court. But she's not a fiscal conservative - she is not arguing that both should be disallowed - she is arguing that the government should be free to do both.

Appropriations do allow the government to take their share of the cut before applying money to its desired objective. An appropriation is also easier for an elected official to claim credit for when hustling for campaign donations. But in no way are tax breaks and appropriations easily substituted for objective-defined governing.